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Vliv Přímých Zahraničních Investic Na Dodavatelské Vztahy A Postavení Domácích Výrobců Meziproduktů
[FDI's Impact on Inter-industry Interactions among Domestic Suppliers of Intermediate Goods]

Author

Listed:
  • Jan Hanousek
  • Evžen Kočenda
  • Pavla Vozárová

Abstract

In this paper, we analyze the extent of the impact of FDI on the host economy according to theoretical predictions. Within a broader context of international trade flows, we focus on inter-industry interactions between a multinational enterprise (MNE) that enters the domestic market and other firms in the economy. We seek to determine if the MNE uses domestic suppliers of intermediate goods or if it purchases its supplies from abroad or from other MNEs entering the downstream sector. Our analysis covers both Western and Eastern European countries over the period 2001-2007. Our results show that FDI increases the demand for intermediary goods. However, domestic producers of these goods can benefit only partially from this positive shock, since they are at the same time crowded-out by MNEs entering the upstream sector as well as by importers.

Suggested Citation

  • Jan Hanousek & Evžen Kočenda & Pavla Vozárová, 2017. "Vliv Přímých Zahraničních Investic Na Dodavatelské Vztahy A Postavení Domácích Výrobců Meziproduktů [FDI's Impact on Inter-industry Interactions among Domestic Suppliers of Intermediate Goods]," Politická ekonomie, Prague University of Economics and Business, vol. 2017(4), pages 391-409.
    • Handle: RePEc:prg:jnlpol:v:2017:y:2017:i:4:id:1151:p:391-409
    DOI: 10.18267/j.polek.1151
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    References listed on IDEAS

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    1. Jordaan, Jacob A., 2011. "FDI, Local Sourcing, and Supportive Linkages with Domestic Suppliers: The Case of Monterrey, Mexico," World Development, Elsevier, vol. 39(4), pages 620-632, April.
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    6. Jindra, Björn & Giroud, Axèle & Scott-Kennel, Joanna, 2009. "Subsidiary roles, vertical linkages and economic development: Lessons from transition economies," Journal of World Business, Elsevier, vol. 44(2), pages 167-179, April.
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    8. Stepan Jurajda & Juraj Stancik, 2012. "Foreign Ownership and Corporate Performance: The Czech Republic at EU Entry," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 62(4), pages 306-324, August.
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    Cited by:

    1. Elheddad, Mohamed, 2019. "Foreign direct investment and domestic investment: Do oil sectors matter? Evidence from oil-exporting Gulf Cooperation Council economies," Journal of Economics and Business, Elsevier, vol. 103(C), pages 1-12.

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    More about this item

    Keywords

    FDI; international trade; multinational enterprise; downstream sector; inter-industry interactions; Europe;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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